B55/100FDD 2026
Baymont Inn & Suites — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
24 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
24
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
84
Government-backed loans issued
Default rate
1.5%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$184.6M
Avg loan size
$2.2M
Participating lenders
47
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed — cannot validate 5% royalty impact or actual profitability across 547 units
- 02HIGHActive litigation including breach of contract suits against franchisees, price-fixing class actions, and Destination Marketing Fee disputes suggest systemic franchisor-franchisee conflicts
- 03MINORWide investment range ($232K-$10.7M) with no average revenue/net income makes ROI modeling impossible and suggests high variability in unit performance
- 04MINORUnknown unit growth trajectory for 547-unit system raises questions about market saturation, franchisee retention, and brand momentum
- 05MINOR5% royalty on gross room revenues is typical but punitive if occupancy rates or ADR are declining — no disclosure allows franchisor to take fixed percentage regardless of profitability
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.